Monetary Policy
FOMC members too bullish on growth, researchers at San Francisco Fed say
‘Persistent overoptimism' about future growth since financial crisis may be due to overestimation of monetary policy efficacy following a balance-sheet recession, authors find
Stevens gloomy on growth as RBA cuts
RBA governor warns Australian economy is showing greater signs of weakness than previously thought, in a statement announcing a cut in the interest rate to record low
Rajan says RBI is seeking ways to encourage foreign investment
RBI tightens rules for foreign investors but Rajan says central bank is looking into ways of encouraging desirable FDI flows; rates remain on hold
Constâncio: ECB ‘encouraged’ by reaction to QE
ECB vice-president points to rise in price of equities and bonds and drop in the exchange rate, but warns against reading too much into financial and real variables
IMF calls for reform at Madagascar central bank
Staff report says central bank needs greater independence and stronger oversight mechanisms; new audit committee on the way and government agrees to recapitalise institution
Denmark suspends bond sales to stem FX inflows
The move, intended to lower longer-term yields and thereby discourage upwards pressure on the krone, ‘effectively works as QE' says analyst
ECB’s Cœuré calls for tougher rules on structural policy
Executive board member says a ‘strong framework’ is needed to manage the interdependence of fiscal, financial, structural and monetary policies in Europe
IMF backs Canada cut despite overvalued housing
Fund says central bank's decision to lower rates for first time in four years is ‘in line with staff advice'; says housing market overvalued by up to 20%
Bank of Russia cuts key rate by 200bp
Central bank cuts rate to 15% just one month after raising it by 650bp to 17%; points to the risk of a ‘sizeable decline in economic activity’ as the motivation for the decision
Brazil's central bank says inflation progress ‘not enough’
A rise in regulated prices is fuelling Brazil’s inflation, which rose 6.69% in January; minutes from latest MPC meeting suggest dissatisfaction with level despite rate hikes
Denmark cuts rate for third time in 11 days
Danish central bank cuts its deposit rate for the third time since the Swiss National Bank decided to abandon its exchange rate commitment; rate now sits at -0.5%
Kganyago: Sarb taking ‘pause’ in normalisation
South African Reserve Bank holds repurchase rate at 5.75%, but monetary policy committee agrees the ‘lower inflation path’ creates the chance to ‘pause’ its tightening cycle
Upbeat Fed statement keeps mid-year rate hike alive
Federal Reserve keeps policy on hold but delivers a positive account of US economy, suggesting inflation will return to target over medium term despite oil price drop
Energy producers should lower interest rates following drop in oil prices, suggests Norges Bank paper
Given spillovers to rest of economy, optimal policy calls for a reduction in interest rates, finds study; central banks face ‘trade-off' between stabilising inflation and closing output gap
MAS makes surprise adjustment to currency policy
In an unscheduled policy statement the Monetary Authority of Singapore announces a reduction of the slope of the currency band after a review of inflation forecasts
Linde says ECB’s stimulus package is ‘ambitious’
Luis Linde, governor of the Bank of Spain, estimates the European Central Bank will buy €100 billion of Spanish government debt under its new asset purchase programme
Turkey’s central bank expects to break letter-writing cycle
The Central Bank of the Republic of Turkey forecasts inflation falling back to target from mid-2015, sparing it a fourth letter to the government in the space of five years
Belgian research examines policy response to oil price shocks
To curb the wealth-shifting effect of oil price shocks ‘optimal policy calls for a large but short-lived increase in the real interest rate’
State Bank of Pakistan slashes rates to decade low
Governor Ashraf Mahmood Wathra strikes upbeat note despite inflation falling significantly below target, as central bank cuts interest rates by 100 basis points
Leading central bankers unsure about impact of technology on monetary policy
Carney, Kuroda and Coeure debate the elusive Phillips curve in Davos; rejecting ‘technological pessimism', Carney says ‘just catching up is a huge opportunity of growth potential'
BoE's Forbes says few MPC members are 'perennial hawks or doves'
External member lays out key risks to Bank of England's central forecast, including stronger US growth, lower oil prices, and exchange rate pass-through
Eichengreen says central banks should worry more about deflation than 'profits and losses'
The Berkeley professor on what last week's SNB move says about big central banks 'wrong-footing' markets and the Fed's problematic response to financial crisis
Obstfeld warns emerging markets face dual trilemmas
BIS working paper dissects emerging markets’ ability to resist monetary policy spill-overs, finding the demands of monetary and financial trilemmas make self-defence difficult or impossible
Carney says eurozone QE 'absolutely necessary'
Bank of England governor says it will ‘create some of the necessary conditions’ for returning prosperity to the eurozone; discusses distributional consequences of monetary policy